Attorney General Eric Schneiderman says five companies that have been making collections on short-term “payday” loans will pay more than $300,000 in restitution and penalties under a settlement.
Schneiderman announced the agreement in Buffalo Monday at the annual convention of the Public Employees Federation.
He says the debt collection companies operating in Erie County also have agreed to stop making further collections on the loans, which violate state law because of their high interest rates.
Payday loans typically have interest rates from 100% to 650% or more — well above New York’s 16% cap for most non-bank lenders.
In August, Schneiderman’s office sued three Internet lenders that investigators said charged annual interest rates for personal loans at rates ranging from 89% to more than 355%.
Copyright 2013 The Associated Press.